Tax on steel and aluminum imports would affect Valley manufacturers
Ordering combative action on foreign trade, President Donald Trump declared the U.S. will impose steep tariffs on steel and aluminum imports, escalating tensions with China and other trading partners and raising the prospect of higher prices for American consumers and companies.
With “trade war” talk in the air, stocks closed sharply lower Thursday on Wall Street.
Trump said firm action was crucial to protect U.S. industry from unfair competition and to bolster national security. His announcement, however, came only after an intense internal White House debate. It brought harsh criticism from some Republicans and roiled financial markets with concerns about economic ramifications.
Local manufacturers that would be affected include Vallourec Star, a steel-pipe producer on Martin Luther King Jr. Boulevard.
“We are awaiting more details of the tariff proposals which reportedly are to be made official sometime next week,” Vallourec said in a statement. “We are assessing the impacts of an across-the-board tariff imposition upon our business and our own supply chains.”
Brian Benyo of Brilex Industries in Youngstown had mixed emotions about the news. Brilex is primarily a steel consumer but manufacturers equipment for the steel industry.
“I am supportive of fair trade, and I am supportive of the fact that the steel industry has suffered from unfair trade,” he said. “The part I struggle with is when those same steel producers are buying equipment that we can supply here domestically from China, from Asia, from Eastern Europe at prices that would put us out of business. Ultimately, the cost of this steel does impact our competitiveness on a global basis,” he said.
Jose Arroyo, a United Steelworkers representative who does labor relations at several area plants, called the move a step in the right direction. Arroyo said it will benefit both the companies producing the product and those that use the product.
“There will be a market adjustment, but it will add added value to the product because it will be an American-made product,” Arroyo said of the impact on companies who use the product. “To be very honest, the quality of [U.S.] steel is a lot higher. In the end I think it’s going to benefit us.”
U.S. Sen. Sherrod Brown, a Democrat from Cleveland, applauded the news.
“This welcome action is long overdue for shuttered steel plants across Ohio and steelworkers who live in fear that their jobs will be the next victims of Chinese cheating,” Brown said in a statement. “President Trump must follow through on his commitment to save American steel jobs and stop Chinese steel overcapacity from continuing to infect global markets.”
Trump, who has long railed against what he deems unfair trade practices by China and others, summoned steel and aluminum executives to the White House and said next week he would levy penalties of 25 percent on imported steel and 10 percent on aluminum imports.
The tariffs, he said, would remain for “a long period of time,” but it was not immediately clear if certain trading partners would be exempt.
“What’s been allowed to go on for decades is disgraceful. It’s disgraceful,” Trump told the executives in the Cabinet Room. “When it comes to a time when our country can’t make aluminum and steel ... you almost don’t have much of a country.”
The president added: “You will have protection for the first time in a long while, and you’re going to regrow your industries. That’s all I’m asking. You have to regrow your industries.”
Increased foreign production, especially by China, has driven down prices and hurt U.S. producers, creating a situation the Commerce Department has called a national security threat.
Critics, however, raised the specter of a trade war, suggesting other countries will retaliate or use national security as a reason to impose trade penalties of their own.
Trump’s move will likely raise steel and aluminum prices here. That’s good for U.S. manufacturers. But it’s bad for companies that use the metals, and it prompted red flags from industries ranging from tool and dye makers to beer distributors to manufacturers of air conditioners.
The American International Automobile Dealers Association warned the tariffs would drive prices up “substantially.”
The National Retail Federation called the tariffs a tax on American families.
“When costs of raw materials like steel and aluminum are artificially driven up, all Americans ultimately foot the bill in the form of higher prices for everything from canned goods to automobiles,” NRF CEO and President Matthew Shay said in a statement.
Contributor: Associated Press